My Thoughts About the Coronavirus: Ray Dalio
linkedin.com
linkedin.com
Here's the full dataset of 1363 mid cap + stocks that traded during the 2008 recession, and their performances: https://shan.io/writing/learnings-from-the-2008-great-recess...
They said 2008 was a once in a lifetime event, too. So what’s the next black swan that will unsettle the market in 2032? The Big One finally hits California? Mount Rainier erupts? The Yellowstone Caldera?
> The markets are being, and will continue to be, affected by these sorts of market players getting squeezed and forced to make market moves because of cash-flow issues rather than because of thoughtful fundamental analysis.
So it sounds like we didn’t learn much from 2008. Will we learn from 2020?
I am busy, right now I am trying to learn that humans will never learn from history. I vaguely remember somebody mentioning that to me in the past, but I dismissed it as a nonsense.
(But I am not really that pessimistic. Somebody mentioned that the Spanish flu was a big impulse for providing national health care services. I think it can have a similar effect, somewhere.)
Now that wars are mechanized and we have nuclear weapons this is less of an impetus.
There might be a different effect here as preditary health care in the US is unpalatable in the best of times.
Perhaps it was in reference to the famous Aldous Huxley quote:
“That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.”
There are ways to go about this and wipe out investors without causing complete economic collapse (e.g. nationalization and orderly dismantling) but "we've" already decided not to go that route.
China has provided roughly a month's advance warning on how this virus plays out in terms of infectivity and severity (~20% of cases are serious / require medical attention, ~5% are critical, and ~2% are fatal).
People prefer to believe that media coverage of the effects in China are fearmongering or even a political "hoax"[1], that it will peter out with warmer weather (it's spread quite quickly in Singapore which is hot and humid at the moment), and that because it's possible to misuse masks and because they don't provide complete protection by themselves they're useless and should be left for healthcare workers[2].
The kind of critical thinking that helps you prepare for things like this seems to be in short supply. Last week people thought I was silly for stocking up on dried goods and essentials, this week every store around me is sold out of hand sanitizer, clorox wipes, and isopropanol.
[0]: Wikipedia, right now
[1]: The US president, at a rally a couple of days ago
[2]: The US surgeon general's twitter page, a couple of days ago
https://www.snopes.com/fact-check/trump-coronavirus-rally-re...
From the page you linked: "During a Feb. 28, 2020, campaign rally in South Carolina, President Donald Trump likened the Democrats' criticism of his administration's response to the new coronavirus outbreak to their efforts to impeach him, saying "this is their new hoax." During the speech he also seemed to downplay the severity of the outbreak, comparing it to the common flu."
A transcript of his exact words at the rally: "Now the Democrats are politicizing the coronavirus. You know that, right? Coronavirus. They’re politicizing it. We did one of the great jobs. You say, ‘How’s President Trump doing?’ They go, ‘Oh, not good, not good.’ They have no clue. They don’t have any clue. They can’t even count their votes in Iowa, they can’t even count. No they can’t. They can’t count their votes.
One of my people came up to me and said, ‘Mr. President, they tried to beat you on Russia, Russia, Russia. That didn’t work out too well. They couldn’t do it. They tried the impeachment hoax. That was on a perfect conversation. They tried anything, they tried it over and over, they’ve been doing it since you got in. It’s all turning, they lost, it’s all turning. Think of it. Think of it. And this is their new hoax."
How does this differ from the person you responded to who said, "Trump did not call COVID-19 a hoax"?
However his rhetorical style is to put emotionally laden words in close conjunction and then repeat them over and over again. People therefore walk away with an emotional message that does not necessarily logically follow from any facts that they were given.
At an emotional level, he is associating COVID-19, Democrats and hoax. With the message that everything that Democrats say is a hoax, including what they say about COVID-19.
We have a total of 2263 currently infected people of which 1000 with few symptoms, 1034 hospitalized and another 229 under emergency treatments [0]
If the number of infected keeps growing (+400 today) and the percentage of hospitalized remains the same, hospitals will have serious problems very soon
[0] https://www.ansa.it/sito/notizie/cronaca/2020/03/03/coronavi...
The big unknown is how many of those that are infected do not even seek medical attention (or were not administered the test). For instance, children appear to show either mild or no symptoms when infected.
Additionaly, speaking for myself, if I came down with something, with mild flu like symptoms, I wouldn't really be going to the hospital. I'd just take some over the counter medicine and power through. I would only seek medical attention if symptoms became severe. It stands to reason that this is how most people would be expected to behave. Therefore, people with severe symptoms would be much more likely to get medical attention, and therefore be tested, and to be hospitalized, or require emergency treatments.. making the stats look a lot worse than they are.
But I guess the incubation period is so long that those more mild cases may resolve before they can be tested.
I think that includes many tests on people who were simply exposed to it somehow, in order to try and stop the spread.
My understanding was until recently Italy was testing people that were asymptomatic but since that got them in trouble by making their situation look worse than other countries they have brought their behavior in line with these other countries.
I keep seeing statements to the effect of "a mask only helps if you're already sick", but we don't know who's sick and who isn't! The only way to ensure all the sick people are wearing masks is to get everyone wearing masks. But perhaps it isn't possible to ramp up production fast enough to make this realistic?
There aren't enough to go around, and they need to be changed after something like 2 hours - or is it 4?
It's easier to just keep people isolated, I guess.
Washing hands, avoiding touching your face, and other measures like these mainly help with what seems to be a far less common vector of transmission via surfaces and physical contact, where the virus only remains active for a very short time.
Droplets in the air are a transmission mechanism but only for short range (3-6 feet) and only a danger from people who cough or sneeze on you. Respirators are effective at stopping that transmission but they are most useful for people treating the sick. But they aren't effective if worn improperly. For most people, avoiding the sick is enough.
Surgical masks are useful for the sick to keep cough and sneeze droplets from spreading. They are also useful to keep people from touching their face.
For example, a quick google of "how does coronavirus spread" brings up this article as the top result: https://www.livescience.com/how-coronavirus-spreads.html
It says:
"The new coronavirus spreads mostly through person-to-person contact within about a 6-foot (1.8 meters) radius, according to the Centers for Disease Control and Prevention (CDC). People with COVID-19, which is the disease caused by the coronavirus, spread viral particles through coughing and sneezing. The particles can land in the mouths or noses of those nearby.
It might also be possible to catch SARS-CoV-2 by touching a surface where the virus has recently landed and then touching one's mouth, nose or eyes, but CDC officials believe this method of transmission is less common."
The current understanding is that the transmission mechanisms for Covid-19 are:
1. Contact 2. Droplets (particles > 20 microns), AND 3. Aerosol (particles < 5/10 microns)
The last one - Aerosol transmission - really adds to why this virus is so infectious.
Unlike balistic droplets, an aerosol plume can stay in a room for a very long time after someone coughs or sneezes. An aerosol plume can stay in the air long after someone flushes fecal matter down a toilet.
As a comparison aerosol transmission is what makes tuberculosis and measle so challenging in terms of containment and infection rate.
You can always publicise an alternate policy when the mask supply does increase later..
It is still silly to stock up things you will most probably not need, and if you do, can still get if people like you would not unnecessarily stock up on them.
We learned a lot from 2008.
This is a different ball game. There is plenty of credit today. This is a supply shock. There are not applicable lessons from a credit crunch to a panic/virus induced supply shortage.
Edit: on #2, it is 'cheaper' to print money to prop pensions up than to have millions of retirees eating dog food
We will learn from 2020 too.
Given that the default assumption should be the COVID-19 will follow the flu pattern of diminishing rapidly in March up to barely any case in April [2]. This by no means try to diminish actions to be cautious, or the risk it imposes. However, if you are asked to put money on a certain direction, betting on warming up weather reducing the R value of the virus enough to stop it is what I would do.
[1] https://www.worldometers.info/coronavirus/ (Sort by new cases) [2] https://www.cdc.gov/flu/weekly/index.htm
See Deadly second wave section in the Spanish Flu [0]: https://en.m.wikipedia.org/wiki/Spanish_flu
https://www.worldometers.info/coronavirus/coronavirus-cases/...
In that case, rather than diminishing rapidly in March, it diminished in May. [1]
[1] https://en.wikipedia.org/wiki/Severe_acute_respiratory_syndr...
In either case, any step at delaying the spread of the virus will have a dramatic effect on the ultimate death toll.
COVID19 is likely very similar.
I've heard mixed things about China's reporting on it. It's more difficult to trust authoritarian regimes by default, but even good preparation can falter if there isn't honest information. Everything sort of followed China's information in the initial stages.
Everyday citizen preparation could be affected by social media manipulation (political manipulation tactics repurposed), but democratic government agencies wouldn't likely trust those sources, although they have to make sure their voice is the authority for citizens and not social media.
So can you effectively prepare for an outbreak when communication is deceptive/less effective/manipulated? I think it's very difficult.
By getting enough testing kits ready so you are not in a situation where hundreds/thousands of possible infections have occurred in Washington state while you've only diagnosed ~100 people.
Did they stop protesting? Going into protest (crowded spaces, close contact with others) seems like a bad idea during a pandemic.
Coverage of that was already dwindling as the months went by and there was no major action by the PRC. In addition, the more extreme protestor actions, like destroying the subway and other infrastructure, made it harder to write about.
I think once some of the protesters became violent, such as setting a bystander on fire, and killing that janitor by throwing a brick at him, coverage decreased significantly.
One thing interesting about the coverage of the Hong Kong protests is it overshadowed the protests in other regions, like Kashmir, Iraq, Venezuela, Indonesia, France, and a bunch of other places.
The world was a vastly different place when the Spanish Flu happened. Think of all the things we have today that we depend on to operate flawlessly that didn't exist back in 1918.
I guess the comparison I would make might be an airplane that is largely analog and manual back then vs. now stuffed with electronics. Take away those electronics and it can't fly manually. So much of our life depends on people to keep the electronics working that any impact to those and their functions (say the electric grid) would cause an immense amount of interconnected havoc.
After reading a lot of information, my bet is that the virus itself is in the same league as a bad seasonal flu (I heard that from at least two experts, and from my MD), and we'll suffer more from our bad handling of the situation, rather than from the virus itself. We should deal with this virus exactly how we deal with seasonal flu. Stay home and wear a surgical mask when we're sick, go to see our MD (wearing a mask) if we have mild symptoms, and go to hospital if we have severe symptoms. Generally, avoid close contacts, don't shake hands and so on.
That being said, better be safe than sorry. I personally will work remotely and avoid public transportations for the following month until we have more information.
Actually, very few people have reasons to think they have the coronavirus now. Of course, if you come back from an infected area, you should be extra careful and follow standard procedures defined by your local government. Right now most people with flu symptoms simply have a cold or the flu, and not the wuhan virus.
I've just listened to an interview of a French doctor and what is happening now is that hospitals are getting overwhelmed with regular people who want to be tested for the coronavirus.
The coronavirus isn't that different from a regular flu virus in terms of care. Mostly, you just need to stay home waiting for it to pass (and of course avoid infecting others). Only people with severe symptoms should go to the hospital.
"This suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively."
[1] https://www.nejm.org/doi/full/10.1056/NEJMe2002387
Also there were 3000 death in China, and new cases are declining. In France alone (20 times less people), it's common to have 10000 death annually from the flu. Of course, China enforced strict containment measures and we don't know the exact numbers, but overall the death toll seem rather small. Why should we expect much worse in the West? And finally, it's not sure, but some experts expect the virus to decline with warmer temperatures. So overall, I'd say there's room for optimism.
I do hope that the death and hospitalization rate ends up being lower and am awaiting studies based on places like the towns in the Italian red zone where they tested every resident and the Diamond Princess. If the rates end up anywhere near the initial estimates, the hospital capacity situation could become very serious unless we enact quarantines.
There isn't enough world production and stock for the average joe to panic stockpile N95 masks.
The likely reason for this walking back in the recommendation is that 1) most people don't know mask sizes and how to fit a mask 2) if we have a limited stock then priority should be given to health workers who have to handle infected patients on a daily basis.
The CDC has said the exact opposite of this. The WHO estimated an initial mortality rate of 3.4%, whereas the flu is well below 1%.
Your GP and some unnamed internet "expert" sources are wrong.
If there's one thing a technologically advanced dictatorship like the CCP should excel at, it's this.
Sounds like you have your conclusion without needing to wait for the results.
I'm more curious about how this will affect India, where the population situation is more similar to China's. I haven't seen any mention of the virus there in the news, yet.
https://www.click2houston.com/weather/2020/02/26/will-housto...
Also, school would be out.
As if sea level rise swamping much of the coastal land wasn't enough, there's the so-called "silver tsunami" -- a large wave of Baby Boomers dying, and their homes being backfilled by a much smaller cohort of new retirees over the coming years.
If the virus becomes widespread in retiree-heavy areas, it's gonna compress a decade-plus of mortality into an incredibly short span. All sorts of places will be affected, but Florida is in for the worst of it.
During the Spanish Flu, it was the 2nd wave the following winter that killed the most people.
China's government is more technocratic, more pragmatic, and also more authoritarian than the US. All of those are very useful characteristics when dealing with a pandemic.
So I would expect the Western approach to result in exponentially faster infection rates, and significantly more resource shortages hindering the "on the ground" response.
I would expect that baseline levels of wellness, demographics, and tangentially related factors like climate will have a larger impact on the outcome than governance, so the US might get lucky in one or more of these areas.
- They're often very corrupt
- It's commonly believed that Nazi Germany relieved the crisis of the 1930s, but that is propaganda and Hitler probably made it worse.
- The propaganda also paints a picture of a strictly organized state, but nothing is further from the truth. Nazi Germany consisted of cogs that didn't work together so much as against each other (the army against the party, the SS against the SA, etc.). Coordinated chaos.
- One man can impossibly oversee everything, he can't enforce his vision in all these different places, resulting in a lot of different "clans" that have power in the name of Hitler.
- Our democracy is a lot of talk and little action, lots of checks and balances, where the public can check what the government does and can remove them from power. That sounds inefficient, but the decisions are carried by the population and let's keep it like that.
Source (in Dutch) with a timestamp where he gets more on-topic (before that is more background info): https://youtu.be/_866RrJJy6A?t=600
I don't say I find it super convincing by the way, certainly points like "one man can't oversee it all" doesn't rule out the option of a group of supposedly smart people that oversee it all (much like today) and make the rules for everyone. No argument is made for democracy, the main argument is against dictatorships with weasel words like "often very corrupt" and against Hitler's dictatorship specifically (when there are more current, seemingly better-functioning and longer-lasting examples like, indeed, in China).
Of course, that I don't find the arguments made very convincing also doesn't mean that I'm in favor of a group of smart people ruling over everyone or against democracy or something.
I just don't know, but this is a datapoint where someone claims that this thought "a dictator should excel at this" may not be right. The podcast typically invites researchers in the field that are often very knowledgeable and give much more convincing presentations; this person is a historian so presumably also knows a thing or two about the topic, even if I still have some questions.
In another two weeks they might have less cases than other regions!
more bailouts? how about letting them take the consequences of their actions? they would have taken the upside so should accept the downside too instead of shifting it to taxpayers. how else will markets stay healthy if evolution is thwarted
maybe
I was stocking up on dry goods and such like everybody else. After the past few days I feel like a panicked fool. Almost every single death report: "Had underlying health conditions."
As far as stocking up, my understanding was that the reason for picking up an extra couple items each time you go to the store was in case eventually certain areas are rec'd to work from home and such. Maybe that won't happen, but it's not like that stuff would go to waste.
Not sure what you mean by "ordinarily" tested. This pandemic is quite a unique situation.
We may be close to the point of saying "fuck it. False alarm this is just a cold. Carry on". Hard to know for sure though until a couple weeks go by
https://news.ycombinator.com/item?id=22476675
I did not check their source. Just saying that "we may be close to saying `false alarm`" seems almost certainly ill-informed.
There is no difference.